I recently had an e-mail exchange with a former co-worker. Her name is, um, well let's call her Betty Lou.

In an e-mail, Betty Lou made a brief comment about the Moguls at Yahoo battling to stay out of the clutches of the Moguls at Microsoft.

Here is my actual response back to her (Really people ... this is what I wrote!).

Betty Lou,

This battle is very compelling, to say the least!

Unfortunately for Yahoo, it doesn't have a lot of room to maneuver. There appear to be few buyers, other than Google, with the funds and the will to take Yahoo from Microsoft's death grip.

But a Yahoo-Google combination potentially creates a problem with the Justice Department. Since Google and Yahoo hold the No. 1 and No. 2 positions in the search market, a merger might be viewed as anti-competitive.

And expect Microsoft to yell loudly in that situation, which would be ironic considering Microsoft's own past anti-competitive issues.

Frankly, I'd like to see that just for the hell of it!

The proposed AOL-Yahoo deal, while sounding compelling - just because it makes Microsoft squirm and keeps the fight going, would likely pass Justice Department scrutiny.

But both of these firms are wounded ducks looking for the right strategy to get back on track. And they might have it. But for shareholders who must vote on any deal, the question is, "Which deal brings more value to them in the near term"?

I think it's real interesting that Newscorp negotiated with Yahoo for a Yahoo-MySpace combination just a short while ago. Now there's talk of them combining with Microsoft to capture Yahoo! That Rupert Murdoch has been very aggressive with his movement into the New Media Digital Realm. I think he's way ahead of other "Old Media Moguls" on that front.

I'm still waiting for a deep-pocket telco (Verizon, AT&T) or cable firm (Comcast) to ride into this fight to scoop up Yahoo. But that's not bloody likely! Verizon and AT&T probably have the money, but based on past history, not the will to do such a deal.

Comcast's stock is down, and I'm not sure about its cash to do such a deal.

So although the will could be there, the means probably isn't.

Last option for Yahoo: A group of private equity buyers that ride in with guns-a-blazin'. But damn it, the private equity market is having its own issues, what with the credit crunch making it difficult to get necessary financing.

Sounds like the Microsoft crew will be snacking on some delicious Yahoo burgers real soon Betty Lou!

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